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Both brand managers are considering either a price reduction of 10% or an incremental increase...

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Accounting

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Both brand managers are considering either a price reduction of 10% or an incremental increase of $200,000 in advertising. 1. What absolute increase in sales units and dollar sales will be necessary to recoup the incremental increase in advertising expenditures for Regular? How about for Sensitive Lips? 1. What is the absolute increase in unit sales and dollar sales will be necessary to maintain the level of total contribution dollarsif the price of each product is reduced by 10% ? 1. After spending $500,000 in research and development, Snapple has developed a new high energy drink. It's called POW. The company plans to use a coupon in local newspaper fliers to promote the brand. They will only be covering 80% of the US market with their advertisements and distribution. The total US market for energy drinks is estimated to be 24 million cans. The coupon is worth $0.40 and only 25% of purchasers are expected to redeem the coupon. The cost of the advertising campaign is $200,000. Other fixed overhead costs are expected to be $100,000 per year. Here's what we know: Suggested Retail Price Cost of Materials Cost of Labor Retail Margin Wholesaler Margin $0.60 bottle $0.18/Can $.07/can 20% off retail price 10% of the retailer's cost

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